Fund Strategies and Market Commentaries
As of September 30, 2014

Midas Magic is focused primarily on investing in large North American companies with a broad orientation towards attractively priced value and growth stocks. After the fall market sell-off, the Fund's cash position was eliminated and its portfolio became essentially fully invested. The companies held in the Fund’s portfolio typically enjoy global operations in cyclical sectors such as financial services, and the top performing holdings in the recent period included Berkshire Hathaway Inc and Cerner Corp, although the more "defensive," consumer company Costco Wholesale Corp. also added to recent returns. The Fund’s positions in giant oil companies, including Exxon Mobil Corporation and Chevron Corp., hindered performance as the price of oil declined. During the fourth quarter of the year, the Fund anticipates increasing its investment in quality companies to more aggressively position the Fund to seek its investment objective of capital appreciation.

Midas Fund’s strategy continues to be focused on higher quality senior and intermediate producers of precious metals and other natural resources, including energy.  The Fund seeks companies with promising exploration potential, expanding production profiles, increasing cash flow, and/or other special growth features. Nevertheless, after reaching a high early in the year of $1,380 per ounce, gold prices fell sharply at the end of the third quarter while energy prices experienced a mild decline, leading to a drop in many metals and energy related stocks. In the recent period, share prices for Detour Gold Corp., Yamana Gold Inc., and Anglogold Ashanti Ltd (ADR) declined the most. Bargain hunting and traditional jewelry manufacturing is currently expected to provide stabilizing demand through the fourth quarter, and increased economic activity could buoy oil prices.  Midas Fund anticipates re-positioning the portfolio in view of these potential trends by adding to some current stockholding and introducing new names into the portfolio. The macro-economic policies of the world's largest economies have not changed, a factor which we consider constructive for investing in hard assets such as precious metals. We believe our patient focus on quality, however, may be rewarded in the long term.

Midas Perpetual Portfolio’s core asset allocation strategy is to invest, consistent with tax planning and lower levels of portfolio turnover, a “Target Percentage” of its total assets in each of the following categories: gold, silver, Swiss franc assets, hard asset securities, and large capitalization growth stocks. The Fund's investment objective is to preserve and increase the purchasing power value of its shares over the long term. The Fund benefited most in the recent period from its holding China Mobile Ltd (ADR), while the Fund’s major allocations in gold and silver hindered returns.  Although currently the Fund has an over-target allocation in gold and an under-target allocation in silver, combined the precious metal allocation is near target. Due to under-target allocations to hard asset securities and large capitalization growth stocks, the Fund currently remains unleveraged. During the fourth quarter, however, the Fund anticipates adding leverage to the portfolio with an increased allocation to large capitalization growth stocks.



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